Deduction by ship-owners – Ship-owners are liable to deduct tax at source under section 192(1). For the purposes of determining the rate of tax applicable, the total salary of the seaman for the year may be estimated as the amount of wages due for a period of ten months on the basis of the monthly wages fixed as per articles of agreement. In cases, where the agreement itself covers a period of more than ten months, the estimated income of such actual period would have to be taken into account for the purpose of tax deduction. If an agreement starts towards the latter part of the year and any seaman satisfies his employer that his income for the year as a whole would not be above the taxable limit, no tax need be deducted for that financial year.

The return of salaries may be made by the Indian employer or the agent of the foreign employer within the time mentioned in section 206.

Considering that the ships would be on the high seas for weeks, payment of the tax may be made quarterly as provided in rule 30.

In respect of Indian seamen engaged on foreign-owned ships, the agents in India of the foreign principal will be responsible for deduction of the tax at source under section 192(1).—Letter : F. No. 12/71/65-IT(B) (extract), dated 5-3-1966.

Deduction by successor employer – The present employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from former or other employer).—Circular : No. 504 [F. No. 275/138/87-IT(B)], dated 8-2-1988.

Deduction on LIC premia, etc. – The deduction provided under section 80C (now rebate u/s 88) will be available to the assessees in respect of sums paid up to 31st March of the financial year towards purchase of National Savings Certificates, etc.—Circular : No. 483 [F. No. 275/64/86-IT(B)], dated 4/31-3-1987.

Exemptions/deductions to be taken into account by employer – Exemptions/deductions to be allowed by employers while computing total income of employees for the assessment year 2011-2012 (financial year 2010-2011) :

Certificate for no dededuction of tax to be obtained by employee – Where an employee claims that his salary is not chargeable to income-tax and therefore, no income-tax should be deducted at source from the salary receivable by him, the employer should require the employee to obtain from the concerned ITO a certificate under section 197(1) authorising no deduction or deduction at such lower rates as may be prescribed in the said certificate.—Circular : No. 147 [F.No. 275/80/74-ITJ], dated 28-10-1974.

Liability of employer is absolute – The liability of the employer to deduct and pay tax under section 192(1) is absolute. Failure to do so would attract liability to pay interest under section 201(1A) as well as other penal provisions under the Act.—Letter : F. No. 237/4/75-A & PAC, dated 23-11-1976.

Adjustment of excess deduction – Excess payment (difference between the actual payment made by the deductor and the tax deducted at source or that deductible, whichever is more) can be refunded, independently of the Income-tax Act, to the person responsible for making such payment subject to necessary administrative safeguards. This amount should be adjusted against the existing tax liability under any of the Direct Tax Acts. After meeting such liability the balance amount, if any, should be refunded to the assessee.—Circular : No. 285 [F. No. 275/77/79-IT(B)], dated 21-10-1980.

Refund to non-resident employee who has left India – Where non-residents are deputed to work in India and the taxes are borne by their employers, and an employee to whom refund is due has already left India by the time assessment order is passed and he has no bank account in India, there may be no objection to giving the refund to the employer if the non-resident assessee duly gives an authorisation in this regard. In such cases, the procedure laid down in Circular No. 285, dated 21-10-1980 needs to be followed—Circular : No. 707, dated 11-7-1995.

In case of crew members of foreign-going ships – Since, in the case of members of crew of foreign-going Indian ships, who are not likely to be in India for a period or periods exceeding 182 days in a year, income which accrues or arises outside India and is also received outside India is not liable to tax in India, the shipping companies and other persons responsible for paying salary to such members of crew may take these factors into account while computing the amount to be deducted as tax and deduct only so much of tax as would be chargeable on the estimated income liable to tax in India. If the shipping company or other person responsible for paying to such members of crew subsequently finds that any person who was earlier considered as not likely to be resident in India, and deduction of tax at source was made on that basis is now likely to be resident in India, the shipping company or the other person responsible for making the payment, may increase the deduction so as to adjust any deficiency arising out of an earlier short deduction or non-deduction during the same financial year – Circular : No. 586, dated 28-11-1990.

Issue of certificate in Form No. 16– Once tax has been deducted under section 192, the tax-deductor is bound by section 203 to issue the certificate of tax deducted in Form 16. No employee-employer relationship is necessary for this purpose. The certificate in Form No. 16 cannot be denied on the ground that the tax deductor, i.e., banks, are unaware of the other income of payees (i.e., pensioners drawing their pensions through banks) – Circular : No. 761, dated 13-1-1998.